In July 2020, just a few weeks after Nashville started reopening the economy, the White House recommended that the city and other COVID-19 “red zones” in Tennessee adopt tighter restrictions, including closing businesses. For small entrepreneurs in the city, this means the road to recovery may take even longer than expected.
With this new development, waiting for the situation to resolve itself is simply not enough. It’s time to revisit your options with your accounting firm and take a closer look at what you can do to survive and even thrive in the “new normal”. Here are a few things to consider.
1. Ask your accountant about new sources of funding
The Paycheck Protection Program is winding down, and even at its height, getting a forgivable loan under the program has been quite challenging. In the meantime, you can expect your cash flow to remain tight.
If you need new funding, it’s best to explore other sources as early as possible. Your accounting firm can help sort through your options, which may include the following:
- The SBA’s Economic Injury Disaster Loan Program, which offers financial aid of up to $150,000 and an emergency grant for small businesses of up to $10,000
- The SBA’s 7(a) Program that offers loans of up to $5 million for working capital infusion, refinancing debts, and similar uses
- The SBA’s 504 loan program, which also offers funding of up to $5 million for such purposes as buying real estate or equipment
- The Federal Reserves’ Main Street Lending Program, which offers loans for small and medium businesses at a minimum amount of $250,000
- A loan or line of credit from your bank. A line of credit may be preferable as it gives you better flexibility and lower interest rates.
- A revenue-based financing from your bank, which provides funding to produce a product or service in exchange for a percentage of your business’s revenues
Always keep in mind that each financing option carries certain risks and requirements, so it’s advisable to consult your accountant before signing on to any of these.
2. Adopt technological solutions
As staying at home habits intensify, either as a result of legislation or personal decisions, technology has become an essential tool in connecting individuals, businesses, and institutions. These solutions are fast emerging as the “new normal” in jobs and commerce today:
- Online retail – If you still don’t have an online shop, it may be time to start one. Make it easy for your customers to find you and buy what they need from you through the internet, using any device.
- Remote working – Many businesses have found that remote working is a highly viable office option, generating even higher productivity in numerous cases. This also addresses concerns with office rental fees and other overhead expenses.
- Artificial Intelligence solutions – Take advantage of the potential uses of AI in your business. For example, it can cluster customer data and send product or content recommendations to customers based on their preferences. It may also be used to generate automatic replies to FAQs, freeing much of your or your staff’s time, or do a data analysis based on activities on your website and other sources.
As the COVID-19 crisis is shaping to be more unpredictable than anyone has anticipated, thinking out of the box has become more critical than ever. Don’t be discouraged and don’t lose hope. Instead, use this opportunity to rethink your business model and find ways to adapt.
PPC Loans Are Ending. Here’s Where Small Businesses Can Turn Now, CNBC.com
15 Important Small Business Trends We’ll See by the End of 2020, Forbes.com